ECOVYST INC. Item 1.01 Entry into a Material Definitive Agreement.
On
Borrowings under the New Term Loan Facility, together with cash on hand, were
used to redeem
Interest Rate
Borrowings under the New Term Loan Facility bear interest at a rate per annum
equal to, at the Borrowers' option, (1) a margin of 3.00% plus a LIBOR rate
(subject to a floor of 1.00%) determined by reference to the cost of funds for
Mandatory Prepayments
The New Term Loan Facility requires the Borrowers to prepay, subject to certain exceptions, outstanding term loans with:
• 100% of the net cash proceeds of any incurrence of debt, other than the
net cash proceeds of certain debt permitted under the New Term Loan
Facility, subject to reduction to reflect a pro rata split between PQ
Corporation's existing senior secured term loan facility (the "Existing
Term Loan Facility") and the New Term Loan Facility based on aggregate
outstanding principal amounts thereof at the time of receipt of the net
cash proceeds, and certain exceptions;
• 100% of the net cash proceeds above a threshold amount of certain asset
sales, subject to reinvestment rights, and subject to reduction to
reflect a pro rata split between the Existing Term Loan Facility and the
New Term Loan Facility based on aggregate outstanding principal amounts
thereof at the time of receipt of the net cash proceeds, and certain
exceptions; and
• a portion of the Borrowers' annual excess cash flow, but only to the
extent that lenders under the Existing Term Loan Facility decline their
portion of the applicable excess cash flow prepayment under the Existing
Term Loan Facility, and in no event to exceed an amount that would
reflect a pro rata split between the Existing Term Loan Facility and the
New Term Loan Facility based on aggregate outstanding principal amounts
thereof at the time such excess cash flow prepayment is made, and certain
other exceptions.
Voluntary Prepayments
Voluntary prepayments of the New Term Loan Facility in connection with a repricing transaction on or prior to twelve months after the Closing Date will be subject to a call premium of 1.00%. Otherwise, the New Term Loan Facility may be voluntarily prepaid at any time without premium or penalty.
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Amortization and Final Maturity
The New Term Loan Facility requires scheduled quarterly amortization payments
equal to 0.25% of the original principal amount of the New Term Loan Facility,
with the balance of the New Term Loan Facility to be paid on
Guarantees and Security
All obligations under the New Term Loan Facility are unconditionally guaranteed
jointly and severally on a senior basis by
All obligations under the New Term Loan Facility are secured, subject to certain exceptions, by substantially all of the assets of the Borrowers and the assets of the guarantors.
Certain Covenants and Events of Default
The New Term Loan Facility contains a number of restrictive covenants that, among other things and subject to certain exceptions, restrict the ability of the Borrowers and the ability of their subsidiaries to:
• incur additional indebtedness;
• pay dividends on capital stock or redeem, repurchase or retire capital
stock;
• make investments, acquisitions, loans and advances;
• create negative pledges or restrictions on the payment of dividends or
payment of other amounts owed from subsidiaries;
• engage in transactions with affiliates;
• sell, transfer or otherwise dispose of assets, including capital stock of
subsidiaries;
• materially alter the conduct of the business;
• modify certain material documents;
• change the fiscal year;
• consolidate, merger, liquidate or dissolve;
• incur liens; and
• make prepayments of subordinated or junior debt.
The New Term Loan Facility also contains certain customary representations and warranties, affirmative covenants and reporting obligations. In addition, the lenders under the New Term Loan Facility are permitted to accelerate the loans or exercise other specified remedies available to secured creditors upon the occurrence of certain events of default, subject to certain grace periods and exceptions, which include, among others, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain material indebtedness, certain events of bankruptcy, certain events under the Employee Retirement Income Security Act of 1974, as amended, material judgments and changes of control.
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The foregoing summary of the New Term Loan Facility is subject to, and qualified in its entirety by, the full text of the New Term Loan Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
On the Closing Date,
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 10.1 New Term Loan Credit Agreement, dated as ofJuly 22, 2020 among CPQMidco I Corporation ,PQ Corporation ,Eco Services Operations Corp. , Credit Suisse AG,Cayman Islands Branch, as administrative agent and collateral agent, and the lenders from time to time party thereto 104 The cover page from this Current Report on Form 8-K ofPQ Group Holdings Inc. , formatted in Inline XBRL and included as Exhibit 101
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